This article is an excellent explanation of cybercurrencies, “a tutorial on the basic notions and mechanisms underlying blockchains,” referencing “variations on familiar algorithms and techniques from classic distributed computing.”

Herlihy uses technical, abstract concepts such as ledger, public and private keys, Byzantine fault-tolerant consensus, and proof of work, and, from sociology, costly signaling to describe a fictional character, Alice, the operator, over time, of multiple businesses. The first business, an online news service, can function with a simple(r) ledger system; the second, a frozen yogurt parlor, has troubles because of spoiled shipments, and implementation of a so-called private blockchain system promises to provide answers to where the problems occur. In this scenario, three people, Alice, trucker Bob, and supplier Carol, are the only entities.

Next, Alice opens a restaurant and hits upon the idea of cryptocoupons. She outsources the management of the coupons to miners, who do the job of developing the consensus protocol. This is analogous to the public blockchain system that underlies cybercurrencies. Alice’s efforts to run her business, especially in the presence of a nemesis, Sybil, are described, along with an explanation of a business between Alice and Bob involving a coupon blockchain and a Bitcoin blockchain.

The article demonstrates the functioning of so-called smart contracts present in Ethereum, and how a fatal flaw known as a bug in concurrency led to the theft of $50 million. The article features definition of terms and pseudocode, and the references include citations of old and new articles.